Facebook has finally revealed the details of its cryptocurrency, Libra, which will let you buy things or send money to people with nearly zero fees. Today Facebook released its white paper explaining Libra and its testnet for working out the kinks of its blockchain system before a public launch in the first half of The association will promote the open-sourced Libra Blockchain and developer platform with its own Move programming language, plus sign up businesses to accept Libra for payment and even give customers discounts or rewards.
In cryptocurrencies, Facebook saw both a threat and an opportunity. They held the promise of disrupting how things are bought and sold by eliminating transaction fees common with credit cards. Meanwhile, the 1. Their unanchored price was susceptible to huge and unpredictable swings, making it tough for merchants to accept as payment. And cryptocurrencies miss out on much of their potential beyond speculation unless there are enough places that will take them instead of dollars, and the experience of buying and spending them is easy enough for a mainstream audience.
Now Facebook wants to make Libra the evolution of PayPal. Libra could also power tiny microtransactions worth just a few cents that are infeasible with credit card fees attached, or replace your pre-paid transit pass.
Facebook has built a reputation for over-engineered, underused products. By now you know the basics of Libra. Cash in a local currency, get Libra, spend them like dollars without big transaction fees or your real name attached, cash them out whenever you want.
So the social network recruited the founding members of the Libra Association, a not-for-profit which oversees the development of the token, the reserve of real-world assets that gives it value and the governance rules of the blockchain. The Libra Association is based in Geneva, Switzerland and will meet biannually. The country was chosen for its neutral status and strong support for financial innovation including blockchain technology. To join the association, members must have a half rack of server space, a Mbps or above dedicated internet connection, a full-time site reliability engineer and enterprise-grade security.
And only up to one-third of founding members can by crypto-related businesses or individually invited exceptions. The Libra Association will be responsible for recruiting more founding members to act as validator nodes for the blockchain, fundraising to jump-start the ecosystem, designing incentive programs to reward early adopters and doling out social impact grants.
This provides a level of decentralization that protects against Facebook or any other player hijacking Libra for its own gain. By avoiding sole ownership and dominion over Libra, Facebook could avoid extra scrutiny from regulators who are already investigating it for a sea of privacy abuses as well as potentially anti-competitive behavior.
We are committed to a dialogue with regulators and policymakers. The Libra Association maintains this basket of assets and can change the balance of its composition if necessary to offset major price fluctuations in any one foreign currency so that the value of a Libra stays consistent. The name Libra comes from the word for a Roman unit of weight measure. That way, a gallon of milk in the U. Each time someone cashes in a dollar or their respective local currency, that money goes into the Libra Reserve and an equivalent value of Libra is minted and doled out to that person.
It never runs fractional. Their share of the total tokens translates into the proportion of the dividend they earn off of interest on assets in the reserve. Those dividends are only paid out after Libra Association uses interest to pay for operating expenses, investments in the ecosystem, engineering research and grants to nonprofits and other organizations.
If Libra becomes popular and many people carry a large balance of the currency, the reserve will grow huge and earn significant interest. Every Libra payment is permanently written into the Libra Blockchain — a cryptographically authenticated database that acts as a public online ledger designed to handle 1, transactions per second. When a transaction is submitted, each of the nodes runs a calculation based on the existing ledger of all transactions. Thanks to a Byzantine Fault Tolerance system, just two-thirds of the nodes must come to consensus that the transaction is legitimate for it to be executed and written to the blockchain.
A structure of Merkle Trees in the code makes it simple to recognize changes made to the Libra Blockchain. With 5KB transactions, 1, verifications per second on commodity CPUs and up to 4 billion accounts, the Libra Blockchain should be able to operate at 1, transactions per second if nodes use at least 40Mbps connections and 16TB SSD hard drives.
Transactions on Libra cannot be reversed. If an attack compromises over one-third of the validator nodes causing a fork in the blockchain, the Libra Association says it will temporarily halt transactions, figure out the extent of the damage and recommend software updates to resolve the fork.
This fee will be negligible to most consumers, but when they add up, the gas charges will deter bad actors from creating millions of transactions to power spam and denial-of-service attacks. Adding more nodes slows things down, and no one has proven a way to avoid that without compromising security.
The Libra Blockchain is open source with an Apache 2. The Libra Association is working with HackerOne to launch a bug bounty system later this year that will pay security researchers for safely identifying flaws and glitches.
The core transaction code looks like: LibraAccount. Eventually, Move developers will be able to create smart contracts for programmatic interactions with the Libra Blockchain. The Libra ecosystem and the Move language will be completely open to use and build, which presents a sizable risk.
But if consumers get ripped off by these scammers, the anger will surely bubble up to Facebook. Libra incentives — rewarding early businesses The Libra Association wants to encourage more developers and merchants to work with its cryptocurrency. Wallets that pull users through the Know Your Customer anti-fraud and money laundering process or that keep users sufficiently active for over a year will be rewarded.
For each transaction they process, merchants will also receive a percentage of the transaction back. Businesses that earn these incentives can keep them, or pass some or all of them along to users in the form of free Libra tokens or discounts on their purchases.
This could create competition between wallets to see which can pass on the most rewards to their customers, and thereby attract the most users. You could imagine eBay or Spotify giving you a discount for paying in Libra, while wallet developers might offer you free tokens if you complete transactions within a year.
Facebook also has another plan to grow its developer ecosystem. So how do you actually own and spend Libra? The idea is to make sending money to a friend or paying for something as easy as sending a Facebook Message. Eventually it wants to offer in-store payments and integrations with point-of-sale systems like Square. Data will only be shared in specific instances in anonymized ways for research or adoption measurement, for hunting down fraudsters or due to a request from law enforcement.
Given Calibra will likely become the default wallet for many Libra users, this extra protection and smoother user experience is essential. Preyed on by greedy payday lenders and high-fee remittance services, targeted by muggers and left out of traditional financial services, the poor get poorer. If Facebook succeeds and legions of people cash in money for Libra, it and the other founding members of the Libra Association could earn big dividends on the interest.
And if suddenly it becomes super quick to buy things through Facebook using Libra, businesses will boost their ad spend there. But if Libra gets hacked or proves unreliable, it could cost lots of people around the world money while souring them on cryptocurrencies.
Facebook just tried to reinvent money. It took me 4, words to explain Libra, but at least now you can make up your own mind about whether to be scared of Facebook crypto. Libra governance — who gets a vote To join the association, members must have a half rack of server space, a Mbps or above dedicated internet connection, a full-time site reliability engineer and enterprise-grade security.
The Libra Reserve — one for one Each time someone cashes in a dollar or their respective local currency, that money goes into the Libra Reserve and an equivalent value of Libra is minted and doled out to that person.
The Libra Blockchain — built for speed Every Libra payment is permanently written into the Libra Blockchain — a cryptographically authenticated database that acts as a public online ledger designed to handle 1, transactions per second.
The use cases, technology and motive behind the new digital money
Since Facebook announced its upcoming cryptocurrency, there has been a lot of speculation from crypto enthusiasts. As Facebook founder, Mark Zuckerberg promotes his vision for the Facebook marketplace and social media platform; he intends to make it a trusted brand for secure payments between users.
Many enthusiasts were uncertain about this offering, and some even wrote that bitcoin might soon get a major competitor. This statement referred to the social networking giant, Facebook. This plan hopes to fill in the gaps where bitcoin has failed such as trust, scale, and clout.
It read. The company is working on a coin that users of WhatsApp, which Facebook owns, could send to friends and family instantly, said five people briefed on the effort who spoke on the condition of anonymity because of confidentiality agreements.
Facebook payment is definitely not a threat in this case. In the first place, the coin has not had any effect on the BTC Price so far. If it were a threat, there could have been some effect on the price of the foremost cryptocurrency. The stablecoin is used as an accounting system for moving dollars around seamlessly.
This is a clear indication that it does not have the ability to compete with bitcoin. On the other hand, it is not aiming at succeeding where BTC failed because bitcoin did not fail. It has done a great job so far by being the largest scale deployment of public key cryptography of all times. It has been used to secure financial and banking transactions on a trustless, transparent, open, decentralized and peer to peer network which is governed by checks and balances.
The tech company is not trying to compete with what bitcoin is capable of. It is creating something else that is completely different and already exists in the tech space today. Many social media users already have issues with how privacy is handled by the company, and it would be difficult to convince people to buy the idea.
Several crypto analysts believe that the plan may just flop and compared it to the failure of Google Plus to take over the social media scene from Facebook. What are your thoughts on this matter? Do you think Facebook coin will displace the leading digital currency? Would you use the coin for anything other than sending messages to a Facebook friend? News Source. Submit Press Release. EY releases third-generation zero-knowledge proof blockchain technology to the public domain About Contact Privacy Terms Disclaimer.
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Trump has been impeached by the What is facebook bitcoin crypto. Most Popular. The government of Japan has begun the process of investigating Libra and doing an analysis on the effect on Japan's monetary policy and financial regulation. The bitcoin price sunk further over the last hour trading period after a sudden sell-off earlier Bitcoin's YTD return is now Facebook has made headlines of late with its plans to create a cryptocurrency. US regulators and politicians expressed concerns within hours of the mid announcement. He is id in New York. Because it is a scarce resource, it has a probability of always increasing in value, which makes you consider a lot more how you spend it. As they did in Julylawmakers railed against Libra, worrying it could facilitate cyrpto laundering and terrorist financing. Sign Up Log In. Bittcoin Tags.